... bonds legislative framework remains focused on issuers satisfying broad principles rather than extensive rules following amendments effective January 2015 for new applicants and January 2016 for programmes already registered. The amendments introduce some additional rules that are likely to be supported by contractual provisions. Supervision by the Dutch Central Bank (DNB) remains the main benefit compared to unregulated programmes. Need for Contractual Provisions: The principles-focused nature of the covered bonds legislation imposes both soft and hard requirements for covered bond issuers. Issuers have used contractual arrangements to comply with many requirements and further strengthen programmes. In particular, Fitch Ratings expects contractual mechanisms to continue to mitigate payment interruption risk beyond the six months required under the law. Effective Segregation of Cover Assets: Asset segregation is legally perfected by transfer...
